PRECIOUS-Gold firms as dollar, yields ease; Biden stimulus plan in focus

(Adds analyst comment, updates prices)
* Dollar hovers near one-week low
* U.S. Fed's policy meeting starts on Tuesday
* Interactive graphic tracking global spread of coronavirus:
https://tmsnrt.rs/3mvcUoa

By Asha Sistla
Jan 25 (Reuters) - Gold prices rose on Monday as the dollar
and yields remained under pressure, with investors eyeing a
dovish U.S. Federal Reserve and a big stimulus package under
U.S. President Joe Biden's administration.
Spot gold XAU= was up 0.5% at $1,860.90 per ounce by 1214
GMT, having fallen as much as 1.8% on Friday. U.S. gold futures
GCv1 rose 0.2% to $1,860.20.
"We are seeing slightly softer yields in the U.S. so that
could be supporting gold... Broadly we are seeing some
consolidation after Friday's fall," said OANDA analyst Craig
Erlam.
The dollar .DXY held close to one-week lows, making gold
cheaper for holders of other currencies, while U.S. Treasury
yields inched down. USD/ US/
"It's clear that the economy is quite fragile, so there is a
lot of support for fiscal and monetary stimulus, and as such the
dollar remains relatively weak, which may underpin gold," said
independent analyst Ross Norman.
Biden's administration has emphasised the urgency for a $1.9
trillion pandemic relief proposal while trying to calm
Republican concerns about it being too expensive. The U.S. Federal Reserve's two-day policy meeting starts on
Tuesday, as it is set to look beyond possible post-pandemic
inflation shock. "Optimism around a $1.9 trillion fiscal stimulus may fuel
expectations of the Fed tapering some of its ongoing support.
Any taper talk could steepen the U.S. Treasury yield curve,
which may provide support to the dollar, ultimately pressuring
gold prices," said Lukman Otunuga, senior research analyst at
FXTM.
"However, if the Fed expresses a willingness to maintain its
ultra-accommodative monetary policy stance, gold is likely to
shine."
Non-yielding gold is considered a hedge against inflation
that can result from large stimulus measures.
Silver XAG= gained 0.8% to $25.60 an ounce, platinum
XPT= rose 0.9% to $1,108.39 and palladium XPD= added 0.1% to
$2,356.07.